Taxing times in the Borders

New powers promised to Scotland over welfare, employability and income tax are starting to take shape following the Smith Commission recommendations.

One area of confusion for some, however, here in the Borders is who will be impacted by income tax changes - those who live in Scotland and work in England, or those who live in England and work in Scotland?

The answer, according to Borders MP Michael Moore is that people will be taxed according to where they live. People who live in Scotland and work in England will have a special ‘S’ tax code on their payslip.

Hans Waltl, chairman of the FSB in the Borders said: “The FSB lobbied the UK Government hard on the need for a sensible approach to the implementation of this tax change and is pleased that they have listened.

“The big questions affecting Borders businesses were how to determine who was a Scottish taxpayer, how this will be done, and what the additional administrative burden would be.

“HMRC is the body that will determine which tax employees will pay and, if you have HMRC-accredited payroll software or outsource the job to your accountant, the administration should prove manageable.”

“There is no doubt that the communities along the Border between Scotland and England will be where the implementation of these new powers will be most rigorously tested.

“This is where we will see whether efforts to minimise red tape and give businesses some clarity have been done effectively. The Scottish and UK Governments have taken a sensible approach to implementing the new tax powers in the Scotland Act 2012 and we will be urging both administrations to adopt a similar approach with the Smith Commission proposals.”

Mr Moore took part in the Smith Commission’s cross-party talks, and he said: “With £20 billion tax powers and £2.5 billion new welfare powers this is a big deal for the Borders and the whole of Scotland. I look forward to the positive impact these new powers will have on individuals, families and communities in Scotland in years to come.”

“I have always been a passionate advocate of devolution for Scotland and I was proud to deliver the Scotland Act 2012 during my time as Scottish Secretary.

“It has been a privilege to take part in the Smith Commission and make good on our promise to further devolution for Scotland. This all party agreement delivers on ‘the Vow’ and I believe it meets the energy and spirit of the referendum.”

John Cridland, CBI Director-General, added: ““Businesses on both sides of the border will welcome the Commission’s support for maintaining the key tenets of a UK single market. And with the vast majority of Scotland’s exports going to the rest of the UK, it is vital that businesses in Scotland can operate without complexity across the UK.”